The STTM is a transparent wholesale spot market for the trading of natural gas that will commence on 4 June 2010. It is being preceded by a 12-week market trial to provide industry and AEMO with a dry run of the market processes and systems in preparation for the live STTM.
Mr Price says “While the trial is a voluntary arrangement, it has widespread support among its participants. It has proven to be of great benefit to participants and AEMO, allowing everyone to trial the processes and systems comprehensively before the real market starts with financial consequences.
“During the trial we have encountered teething problems with processes and systems, which was not unexpected. Rather, this simply highlights why it is so important to conduct a comprehensive ‘as live’ trial like the one underway prior to launching a new market. It has allowed everyone to quickly identify and resolve issues found in processes and systems before the real market commences,” Mr Price says.Article continues below…
“It also helps identify areas for improvements and changes going forward while building understanding and confidence in the market,” he says.
The STTM systems are operating robustly, and scheduling and pricing processes are working reliably.
The early phase of the trial tested a series of relatively unusual situations (such as high priced days and gas shortages leading to contingency gas events) by running specially scripted scenarios. Each of these scenarios proceeded largely according to plan, enabling the proving of processes and systems.
The scripted scenarios are now complete and participants are operating in a manner similar to live operations. AEMO is utilising a smooth cutover approach, which means that the transition from trial to live market should be relatively seamless.